Growth Strategies: Where Do We Want To Go? In this learning activity, we will develop skills related to describing how strategy is developed at the corporate, business unit, and functional levels in an organization. Knowing where the organization is at the present time enables managers to set a direction for the firm and allocate resources to move in that direction. Two techniques to aid in these decisions are the (1) business portfolio analysis and (2) market- product analysis. The Boston Consulting Group's (BCG) business portfolio analysis uses quantified performance measures and growth targets to analyze a firm's business units (called strategic business units or SBUS by BCG) as though they were a collection of separate investments. Read the mini case study below and respond to the questions that follow. If in 1997 a customer had been charged a late fee of $40 for a VHS tape of Apollo 13, what might she or he have done? Maybe just grumble and pay it? In the case of Reed Hastings, he was embarrassed, apparently paid the $40 late fee, and-this is where he's different-got to thinking that there's a big market out there. "So I started to investigate the idea of how to create a movie-rental business by mail," he told a Fortune magazine reviewer. The Original Business Model: "Early on, the first concept we launched was rental by mail, but it wasn't subscription-based so it worked more like Blockbuster," says Hastings, the founder and chief executive officer of Netflix. It wasn't very popular. So in 1999, he relaunched his idea with a new business model-as a subscription service, pretty much the mail business you see today. "We named the company Netflix, not DVDS by Mail, because we knew that eventually we would deliver movies directly over the Internet," Hastings says. Netflix's Changing Business Model: The Netflix DVDs-by-mail model delivered movies on DVD to customers
Growth Strategies: Where Do We Want To Go? In this learning activity, we will develop skills related to describing how strategy is developed at the corporate, business unit, and functional levels in an organization. Knowing where the organization is at the present time enables managers to set a direction for the firm and allocate resources to move in that direction. Two techniques to aid in these decisions are the (1) business portfolio analysis and (2) market- product analysis. The Boston Consulting Group's (BCG) business portfolio analysis uses quantified performance measures and growth targets to analyze a firm's business units (called strategic business units or SBUS by BCG) as though they were a collection of separate investments. Read the mini case study below and respond to the questions that follow. If in 1997 a customer had been charged a late fee of $40 for a VHS tape of Apollo 13, what might she or he have done? Maybe just grumble and pay it? In the case of Reed Hastings, he was embarrassed, apparently paid the $40 late fee, and-this is where he's different-got to thinking that there's a big market out there. "So I started to investigate the idea of how to create a movie-rental business by mail," he told a Fortune magazine reviewer. The Original Business Model: "Early on, the first concept we launched was rental by mail, but it wasn't subscription-based so it worked more like Blockbuster," says Hastings, the founder and chief executive officer of Netflix. It wasn't very popular. So in 1999, he relaunched his idea with a new business model-as a subscription service, pretty much the mail business you see today. "We named the company Netflix, not DVDS by Mail, because we knew that eventually we would deliver movies directly over the Internet," Hastings says. Netflix's Changing Business Model: The Netflix DVDs-by-mail model delivered movies on DVD to customers
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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